Northeast Heats Up As Retailers Fill A Void

NEW YORK — The Northeast
is shaping up to be the newest
retail battleground as independent
dealers — including
Ultimate Electronics and a
re-merchandised Sixth Avenue
Electronics — vie for a piece of
that abandoned market.

The liquidation of Circuit City,
the departure of Tweeter from
its New England and Pennsylvania
strongholds, and the bankruptcy
in February of Connecticut-
based Bernie’s, has left a
specialty store void that has
not gone unnoticed by chains both near and far.

Laying the groundwork for a coming turf
war are recent expansions by hhgregg,
P.C. Richard & Son, Sixth Avenue, Paul’s
TV and, most recently, Ultimate. What’s
at stake, according to estimates by The
NPD Group, is the 33 percent of Circuit
City sales volume left unclaimed by Best
Buy and Walmart, on top of any remaining
market share that was abdicated by Bernie’s
and Tweeter.

Much of the contention will be centered
in the greater Philadelphia area, where
New Jersey-based Sixth Avenue opened
two stores last year, New York metro-area
powerhouse P.C. Richard will open two
this year, and Indianapolis’ hhgregg is entering
Eastern Pennsylvania and nearby
Atlantic City, N.J., this spring as part of
its 45-store Mid-Atlantic build-out.

Facilitating the expansions is a surfeit
of empty Circuit City storefronts, which
suits the big-box footprint of P.C. Richard
and hhgregg. Those two chains, which
feature commissioned sales floors and
a similar mix of mid- to higher-end CE
and majaps, are the most likely to come
to direct blows, although Sixth Avenue
has also entered the fray by adding white
goods to its mix and stepping up to larger
35,000- to 40,000- square-foot stores.

According to Sixth Avenue operations
VP Tom Galanis, the decision to introduce
appliances (under former Best Buy merchant
Tom Cook), as well as dedicated PC
and gaming departments, was prompted
by customer demand, rather than any
competitive considerations. “We don’t react
to others,” he told TWICE. “This is a
free country built on competition, and everybody’s
welcome to compete. We just
stay focused on our customers.”

P.C. Richard president Gregg Richard
similarly told TWICE in a recent interview,
“We welcome new competitors
into the most difficult market in the
country, where we have a loyal customer
base. We have dealt with competitors
all our lives,” including former New
York metro-area leaders Brick Church,
Crazy Eddie, Newmark & Lewis, The
Wiz, Tops Appliance and Trader Horn.
“We’ve seen ’em come and go.”

Dealers will soon be butting heads in
New England as well. P.C. Richard, which
opened its first Connecticut store last
spring, plans to have as many as six locations
in the Constitution State by year’s end,
and is eyeing Rhode Island and Massachusetts.
Paul’s TV, the Los Angeles-area specialty
A/V dealer, already established itself
in the market by opening CE shops within
four Jordan’s Furniture showrooms in
Massachusetts and New Hampshire.

Also getting into the fray is Ultimate
Electronics, the Colorado-based A/V
chain that was brought out of bankruptcy
in 2005 by investor Mark Wattles. The
34-store specialty retailer opened its first
East Coast location in Leominster, Mass.,
last month, and reportedly plans to open
its first New York state store by June.